Project Risk Analysis
SOCOTEC’s Project Risk Analysis Team assists clients with balancing the contingencies of risk with specific contractual, financial, operational, organizational, and political requirements. By identifying potential risks during the pre-execution phase, we assist our clients in preventing increased costs, delays, and disruptions. Our risk analysis and management process entails identifying construction risks and exposures, and formulating an effective risk management strategy to mitigate the potential for loss. SOCOTEC helps clients identify and manage risk throughout the engineering and construction process from planning through completion.
Project Risk Management & Analysis
SOCOTEC understands construction and engineering projects increase in complexity; therefore, the magnitude of risk involved for owners, contractors, architects, engineers, investors, and financial institutions increases the possibility of negative impacts on projects. Our construction professionals adapt to the continuously changing engineering and construction industries while maintaining proven practices and procedures throughout the construction process. SOCOTEC’s risk management team identifies and provides detailed comprehensive analysis of potential project impacts by utilizing the following techniques:
Risk Management Techniques
- Risk Simulations and Analysis
- CPM Schedule Analysis
- Quantifying Expected Values and Modeling Risk Profiles
- Decreasing Risk Aversion
- Due Diligence
Risk Management Assessments
- Contract and Specification Requirements
- Constructability Review
- Budgetary and Final Project Costs
- Assess Financial Viability of Potential Subcontractors/JV Partners
- Survey and Record Pre-Construction Conditions (adjacent areas, access roads, etc.)
- Schedule Acceleration
- Change Order Identification and Approval
- Request for Information (RFI) Assessment
- Construction Methodology
- Delays and Disruptions
- Termination/De-Scoping Assessment and Recommendation
- Damages Assessment
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Lender & Acquisition Consulting Services
Description: Our consultants assist with reviewing ongoing operations of a company and recommending “best practices” to improve those operations. We have extensive experience in resolving troubled business situations by mitigating cost overruns and implementing pro-active risk control measures. We provide a variety of services throughout the construction process from planning to project close-out.
On major transactions, typically greater than $20 million, lenders generally seek an independent opinion of a project or acquisition’s viability for the benefit of other participating lenders, governmental review agencies, and corporate compliance. For these projects, Synergen’s services include, but are not limited to:
Project Management – Project scope and time scheduling are reviewed for reasonableness and likelihood of success. A substantial number of projects exceed the planned work scope and project duration, often at considerable cost to the owner and lender. Factors influencing the success of a large scale project include the following:
Systems and Procedures
Qualifications of Contractors and Vendors
Contract Terms and Conditions
Previous Successes and Failures
Economic Viability – Economic assumptions used to justify the project are reviewed, including the macroeconomic assumptions, the owner’s estimated productivity and profitability assumptions, and the economic assumptions utilized in the project costs. Many projects fail to realize their expected return due to improper economic assumptions of ongoing operating costs and other factors.
Business Operations – Ongoing operations of the project and enterprise are reviewed to identify “best practices” improvements to the existing operations and enhance operations after project completion. In many cases, our recommendations lead to enhanced profits far in excess of the project review costs. Improved operations and profitability reduce the lender’s risk in the project.
SOCOTEC’s acquisition review is most beneficial when the acquirer of the business is a financial entity or in an industry not directly associated with the acquisition.
Many financial buyers focus on acquiring businesses with experienced and professional industry management. The management team of the acquired company, while competent within their industry, does not usually have extensive exposure to “best practices” that can be utilized to improve company operations.
In order to implement best practices, several of SOCOTEC’s services that differentiate us from other firms include:
-Reviewing efficiency of the operation and recommending best practices to improve efficiency and reduce costs
-Reviewing capital expenditure and future operating cost assumptions for reasonableness and efficiency
-Reviewing organizational structure and quality systems to optimize customer satisfaction and profitability goals
A troubled project or business can occur when either the owner or contractor is unable or refuses to continue the performance of its requirements due to insolvency, bankruptcy, force majeure or any other reason.
To minimize lender liability exposure, lending institutions utilize SOCOTEC’s experience in resolving troubled business situations by reviewing and implementing pro-active risk control measures. While lending institutions seek to be extremely cautious not to impose “lender liability exposure” to troubled projects, typical reactions in the industry include the following:
-Lending institutions insert clauses into financing agreements that require the owner to seek project management assistance from a pre-approved list of project management consultants when a project is more than a certain percentage over budget or exceeds the original timeline by more than a certain percentage.
-Lending institutions attempt to mitigate catastrophic cost overruns to seek preventative assistance.
-By avoiding catastrophic cost overrun projects, lenders avoid being drawn into contractual settlements and associated litigation.
When a project or business is troubled, SOCOTEC’s management experts quickly take action to implement procedures to get projects or businesses back on track. Additionally, our highly skilled team works with clients to mitigate and resolve problems while supporting progress. We are able to evaluate the situation and develop plans focused on moving forward, as well as execute these plans to ensure completion.
Market trends, customer needs, and effective market strategies are essential to success in any industry. It is important for a company to possess knowledge of market and industry trends, legal and regulatory changes, as well as political and economic changes in order to prevent loss of opportunities for their business.
SOCOTEC’s professionals have worked within many different industries and can provide thorough market analyses within a variety of sectors and industries. Our market research and analysis service provides clients with a better understanding of the environment their business operates in. We benefit companies by helping them identify new opportunities and execute competitive strategies, as well as assist in making smart business decisions.
SOCOTEC’s Professionals are educated and experienced in the following industry sectors:
Our professionals’ strong backgrounds and degrees in accounting and finance enable us to efficiently and effectively obtain and analyze relevant financial and economic information to be used by our clients in the context of both litigation and non-litigation matters.
The following are examples of some of the services we have provided in the past to our clients on general consulting engagements:
- Asset valuation
- Business valuation
- Acquisition review
- Economic modeling
- Financial and accounting fact finding
- Information management
- Analysis of internal controls